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Wednesday, January 24, 2007

One of President Bush’s best applause lines from last night's SOTU speech was when he made this request:

… to further protect America against severe disruptions to our oil supply, I ask Congress to double the current capacity of the Strategic Petroleum Reserve.

So how meaningful would it be to double the Strategic Petroleum Reserve (SPR)?

I’m willing to bet that most of the stuffed shirts (or blouses, as the case might be) who were standing and clapping to Bush’s request didn’t have much of a clue.

Well, I checked some numbers to find out, and my conclusion was that it’s a worthwhile move (although Bush could have proposed bolder steps to lessen our dependence on oil).

Eighteen months ago, there were barely 700 million barrels of oil in the SPR. That figure may be a little higher today, but probably not much higher — partly because the government tapped into the SPR soon after it reached 700 million barrels in order to ease supply shocks caused by Hurricane Katrina.

Americans use roughly 20 million barrels of oil each day. In other words, if a unified OPEC embargo and/or a large-scale war cut oil imports to a trickle, the current SPR would cover us for 35 days. Doubling it, as Bush proposes, the nation’s economy would be covered for 70 days by the SPR.

Seventy days may not seem like a long time, but we would have a few other things working in our favor. Our next-door neighbor, Canada, is one of our major energy suppliers. And we still have some domestic or off-shore supplies of oil.

One caveat: the SPR would supply us with oil, but it wouldn’t prevent big price shocks because, according to one industry source, it takes 13 days before any SPR oil actually reaches the marketplace. (The SPR is stored in a remote location in underground caverns.)